Handling Uninformed Leave: How to Manage Final Settlements and Legal Compliance

Right now, I am working at a company where the workers continuously do their job for months and then come back after a long break.

1) How can we handle the full and final settlement of the uninformed leave worker?
2) Can we proceed with the full and final settlement without an NOC?
3) Is it possible to deposit the full and final settlement of the worker in any trust for those who have not completed the procedure?
4) How can we ensure compliance with all legal aspects and welfare laws of the company and the workers while handling this process?

Dear Sunijapur,

As the workers return after a long break, is there a need for full and final (F&F) settlement, which is done once for all? NOC is an administrative requirement, and the F&F settlement cannot be withheld for non-submission of it. It is an administrative action and can be organized internally too. In certain states, the Welfare Fund Act empowers the deposit of unpaid amounts to workmen, and the employer's responsibility ceases thereafter. Please check.

Dear Sunijapur, apparently, your question is not clear to me. What do you mean by "F&F settlement" and the correlation of the "NOC" you mentioned to it when the employee comes back after a long absence are also equally confusing to a person like me who has never worked in any industrial establishment belonging to the Private Sector or Public Sector.

Understanding Unauthorized Absence

Unauthorized absence from duty for a short or longer duration, apart from being misconduct, is a breach of the contract of employment on the part of the employee, and the immediate consequence is a proportionate loss in his wages. When such an absence is for a very long period, it has to be treated as abandonment of services, and disciplinary action has to be taken against the absentee. It can end up with dismissal from service or, under humanitarian considerations, he can be permitted to resign to facilitate his future employment elsewhere. Only then will the question of F&F Settlement arise.

Handling F&F Settlement

In the event of continued abscondence on the part of the employee at every stage of the procedure described above, you have to calculate the pending dues, if any, from your records. After deducting any sums due to the management, you have to deposit the amount with the State Labor Welfare Fund under the unclaimed amounts deposit head, as rightly observed by our friend KK!HR. Regarding the statutory gratuity, if any, you have to deposit the sum with the Controlling Authority for the area under the Payment of Gratuity Act, 1972.